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On paper, it’s just a lawsuit — one of many that crawl through the machinery of international arbitration each year. But beneath the legal jargon and dollar signs, Rosatom vs. Fortum & Outokumpu tells a bigger story. A story about how war bleeds into commerce. About the fragility of contracts in an age of geopolitics. And maybe — depending on how this plays out — a cautionary tale for any company still navigating business with sanctioned states.
Let’s start with the facts. On 5 May 2025, Rosatom, Russia’s state-owned nuclear energy corporation, filed a claim seeking $2.8 billion in damages from two Finnish companies — Fortum and Outokumpu — over the cancellation of the Hanhikivi‑1 nuclear power project (Reuters, 2025). The arbitration is international, likely under ICC or SCC rules, though the precise seat remains undisclosed. Moscow is the formal launching point — but the heart of the matter isn’t geography. It’s what happens when a commercial contract gets swept up in a war.
The Dream That Was Hanhikivi‑1
Before it became a legal spectacle, Hanhikivi‑1 was a promise. A vast nuclear plant to be built on Finland’s western coast in Pyhäjoki, projected to generate clean energy for decades. Rosatom was to supply the reactor — a VVER-1200 — and take on a substantial portion of the financing. Finnish stakeholders, through a joint venture called Fennovoima, were to lead development on home soil.
There was optimism, at least initially. Energy independence, cross-border collaboration, carbon reduction. It felt like a future-looking project, even progressive.
But that was before February 2022. Before Russia invaded Ukraine. Before the EU imposed sanctions that severed so many commercial ties, some cleanly, others messily. And this? This got messy.
By May 2022, the Finnish government had revoked Rosatom’s construction permit — citing national security and a collapse in political trust (NucNet, 2025). Fennovoima followed with an official contract termination. Rosatom waited. Two years, in fact. And then came the $2.8 billion claim.
A Case That’s Anything But Simple
So here we are. One canceled project. One state-backed plaintiff. Two multinational defendants. And an arbitration claim steeped in questions that don’t have tidy answers.
From Rosatom’s side, the argument is straightforward — at least superficially. The Finnish parties breached contract. The termination was politically motivated, not legally justified. And Rosatom, through its subsidiary RAOS Project Oy, lost money — lots of it — on upfront investments, technical services, and nuclear fuel arrangements (Reuters, 2025).
But then come the defenses. And this is where it gets interesting.
Fortum and Fennovoima are expected to lean heavily on force majeure. That is, the idea that external events — in this case, EU sanctions and Finnish government prohibitions — rendered performance not just impractical but impossible (Guide to NY Convention, 2023). It’s a familiar concept, often invoked but rarely clear-cut. Because “impossible” is a high bar.
Under international law, you don’t get to simply walk away because circumstances got harder. The force majeure clause must be explicit in the contract. The event must objectively prevent performance. And you have to act fast — notify your counterparty, try to mitigate loss, show that you didn’t just fold under pressure (Guide to NY Convention, 2023).
Whether Finland’s actions crossed that threshold… well, that’s for the arbitrators to decide.
But Let’s Not Pretend This Is Just About Law
It rarely is, when states get involved.
Rosatom’s case is as much about optics as it is about outcomes. Framing the dispute as a test of “contractual sanctity” — a phrase they’ve used — Rosatom is implicitly pushing back against the idea that politics should dissolve legally binding obligations (Reuters, 2025). It’s an argument crafted for international ears. Perhaps even future investors.
There’s something performative here — not in a cynical sense, necessarily, but in the way that all high-profile arbitration becomes theater. Rosatom is saying: We may be sanctioned, but we’re still playing by the rules. Are you?
On the other side, Fortum claims its hands were tied. The Finnish state pulled the permits. Operating without them wasn’t just risky — it was unlawful. Continuing would’ve put them in breach of Finnish regulatory law. In a sense, the company is caught between two sovereigns: the obligations under contract, and the prohibitions imposed at home.
What’s a corporation to do?
The Venue Question: Where Justice Is Sought (and What That Means)
There’s still ambiguity around where this arbitration will actually be heard. Rosatom has filed proceedings in Moscow, but reports suggest parallel or follow-up claims may land in Western arbitral forums like the ICC or SCC (Reuters, 2025).
That choice isn’t cosmetic. It’s strategic.
A Russian venue may give Rosatom a home-court advantage, but enforcing any award outside Russia — especially in the EU — is practically impossible under current sanctions regimes. Meanwhile, an ICC or SCC tribunal with a European seat would offer greater neutrality… and possibly legitimacy. But it also risks a more skeptical hearing.
And this is where enforcement becomes the hidden climax of the story.
Even if Rosatom wins — a big if — collecting the award in a hostile jurisdiction may trigger public policy exceptions under the New York Convention. That is, courts in Finland or other EU nations may refuse to honor an arbitral award if it conflicts with their domestic or international policy commitments (Guide to NY Convention, 2023).
And sanctions? They’re nothing if not policy commitments.
Stretching the Edges of Force Majeure
This isn’t the first time sanctions and force majeure have locked horns. But it may be the most high-profile case to test their interaction in the nuclear energy context — a sector where national interest is always lurking just beneath the surface.
If the tribunal agrees that EU sanctions constituted force majeure, it could establish a soft precedent: that companies facing similar geopolitical constraints have a legal basis to exit contracts with sanctioned entities. On the flip side, if Rosatom wins, the message is arguably more chilling: that companies can’t shield behind sanctions unless they were literally paralyzed by law.
Neither answer is wholly satisfying. Because the truth — as always — lies somewhere murky in between.
And Then There’s the Shareholder Question
Rosatom’s decision to go after Fortum and Outokumpu directly — despite neither being a direct signatory to the EPC contract — is provocative.
It raises uncomfortable questions about the liability of minority stakeholders in public-private partnerships. When does financial involvement morph into legal exposure? What responsibilities, if any, do passive investors carry when a deal collapses?
This could have wide-reaching implications. Not just for energy deals, but for infrastructure, defense, and any project where national and commercial interests are intertwined.
It’s also, arguably, a pressure tactic. Pull more players into the claim, and the chances of settlement — or at least some movement — increase.
More Than $2.8 Billion: The Stakes Beyond the Ledger
It’s tempting to view this as a numbers game. $2.8 billion is a lot, sure. But it’s not the number that matters most.
This case is about what happens when international business becomes collateral damage. When legal certainty gives way to political expediency. And when the tools we use to resolve cross-border disputes — contracts, arbitration clauses, treaties — buckle under the weight of real-world events they were never quite built to handle.
In an ideal world, contracts would protect against this. But in our world — messy, fractured, deeply political — they’re sometimes just paper. Especially when sovereign decisions rewrite the rules mid-game.
So What Now?
The arbitration is set to stretch well into 2026. Hearings are scheduled. Arguments are being drafted. And somewhere, in a room with high ceilings and water pitchers and solemn-looking lawyers, arbitrators will eventually decide whose story rings truer.
But whatever the ruling, the implications are already echoing beyond the case.
Because this isn’t just about Fortum and Rosatom. It’s about whether force majeure can bear the weight of geopolitics. Whether companies operating in sanctioned regimes can ever feel legally secure. And whether — in a world where business and politics are inextricably entangled — commercial law can still promise predictability.
We may get an answer. Or we may just get another exception. That, too, would be telling.
References
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Guide to NY Convention (2023) Article V – Grounds to Refuse Recognition and Enforcement. Available at (Accessed: 9 May 2025).
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NucNet (2025) ‘Rosatom files suit over abandoned Hanhikivi‑1 nuclear project’, NucNet, 6 May. Available at (Accessed: 9 May 2025).
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Reuters (2025) ‘Russia’s Rosatom sues Finnish firms for $2.8B over nuclear plant cancellation’, Reuters, 5 May. Available at (Accessed: 9 May 2025).